Filed: July 16, 1993
Katz, Kantor & Perkins
Bluefield, West Virginia
Attorney for the Plaintiff
Dwayne E. Cyrus
White's Law Office
Princeton, West Virginia
Attorney for the Defendant
JUSTICE BROTHERTON delivered the Opinion of the Court.
A plaintiff's uninsured motorist coverage is not
available as an alternative to the tortfeasor's liability coverage
when the plaintiff did not file a claim against the tortfeasor's
insurance company until after the statute of limitations had lapsed
on the tortfeasor's liability policy.
This case involves three questions certified from the
United States District Court for the Southern District of West
Virginia to this Court. The certified questions are as follows:
1. Is an action for willful breach of contractual and good faith duties to settle a claim for uninsured motorist coverage governed by the statute of limitations for tort actions or the statute of limitations for contract actions?
2. Does a denial of coverage to an injured
party by a tortfeasor's liability insurance
carrier render the tortfeasor's vehicle an
"uninsured motor vehicle" within the meaning
of West Virginia Code § 33-6-31(b)?
3. Does the partial payment of medical
expenses by an insurer who served as both the
automobile insurer for the tortfeasor who
caused the injury and as the uninsured
motorist carrier for the injury party, estop
the insurer from seeking dismissal of the
injured party's action against the insurer for
willful breach of contractual and good faith
duties to settle the injured party's claim for
uninsured motorist coverage, if such motion to
dismiss by the insurer is based on the injury
party's failure to institute a personal injury
suit against the tortfeasor within the two-year statute of limitations governing tort
The plaintiff below, Lewis Harman, filed suit in the
Circuit Court of Mercer County on March 13, 1992, alleging that
State Farm had willfully breached its contractual and good faith
duties to settle Harman's claim for uninsured motorist coverage and
medical payments. Based upon diversity jurisdiction, State Farm
removed this action to the United States District Court for the
Southern District of West Virginia in Bluefield.
This case relates to an automobile insurance policy
issued by State Farm on July 15, 1983, to Arnold Lee and Annie
Harman regarding a 1976 Ford Granada. The insurance policy
included liability, medical payments, and uninsured motorist
coverage. Lewis Harman was a named insured under this policy.
On November 8, 1988, while the policy was in effect,
Harman was struck from behind by a second automobile driven by
David Neal while he was operating the 1976 Ford automobile. State
Farm was also the automobile liability insurance carrier for Mr.
Harman contends that "thereafter, attempts at settlement
began between Lewis A. Harman and the defendant, State Farm
. . . ." Harman claims that State Farm offered Mr. Harman $850
after he submitted his medical bills to State Farm for payment
under either the Neal policy or the medical payment provision of
the Harman policy. The plaintiff contends that State Farm
unilaterally decided that some of the bills were not reasonable and
necessary and did not make payment on the bills until after the
tort statute of limitations had run, and then made only a partial
payment.See footnote 1
Harman first filed suit on March 13, 1992, approximately
three and one-half years after the accident.See footnote 2 State Farm counters
that it refused the plaintiff's claim because no cause of action
had been filed by Harman on or before November 8, 1990, when the
statute of limitations lapsed. In the suit filed in March, 1992,
the plaintiff asserted a direct action against State Farm in an
attempt to obtain uninsured motorist benefits from Harman's own
policy. No judgment was ever obtained against the tortfeasor, nor
was any monetary settlement made with Mr. Neal.
State Farm admits that prior to November 8, 1990, it
offered Harman $850 for settlement of the property damage claimed.
State Farm argues that the offer was made under the liability
policy of Mr. Neal and later withdrawn after the two-year statute
of limitation lapsed. Further, on April 2, 1990, prior to the
lapsing of the statute of limitations, State Farm requested medical
records from Harman's counsel in order to determine what injuries
he had sustained. State Farm contends that no response was
received, and the subsequent liability claims made by Harman for
property damage and bodily injury against the Neal liability policy
were denied because the two-year statute of limitations had lapsed.
Specifically, State Farm responded: "Please be advised that we
will not consider Mr. Harman's bodily injury claim since the
statute has elapsed . . . ." Finally, State Farm admits that
partial payment was made of the plaintiff's medical bills under the
medical payment portion of Harman's policy. State Farm argues that
the partial payment represented the total of the medical bills
incurred by the plaintiff, less certain items not covered under
State Farm's medical payments coverage.
Harman's claim filed on March 13, 1992, was based upon
the Harman policy underinsured motorist provision and medical
payments coverage. Harman filed a claim under his policy because
Neal's liability policy was no longer available due to the running
of the statute of limitations. After State Farm denied
underinsured motorist coverage and refused to pay the medical bills
in full, the plaintiff brought this action for breach of contract
in the Circuit Court of Mercer County. State Farm removed the
action to the United States District Court for the Southern
District of West Virginia in Bluefield. The plaintiff alleges that
State Farm acted in bad faith and with a vexatious manner,
willfully violated provisions of the insurance policy providing
coverage for Harman.
The plaintiff maintains that this action for uninsured
motorist benefits is a contract action, governed by a ten-year
statute of limitations, rather than a tort action with a two-year
statute of limitations. He also argues that State Farm's payment
of a portion of his medical bills led him to believe that the
defendant would settle the claim in good faith and thus, he failed
to file a personal injury action against Neal on or before November
8, 1990, when the two-year statute of limitations would run.
Thereafter, the United States District Court certified the three
questions listed above to this Court.
We first address the second certified question, which
asks whether a denial of coverage to an injured party by a
tortfeasor's liability insurance carrier renders the tortfeasor's
vehicle an uninsured motor vehicle within the meaning of W.Va. Code
§ 33-6-31(b).See footnote 3 In this case, Harman attempted to collect against
Neal's liability policy, only to have it denied because the tort
statute of limitations had run.
State Farm responded to Harman's claim against the Neal
liability policy as follows: "Please be advised that we will not
consider Mr. Harman's bodily injury claim since the statute has
elapsed . . . ." Based upon this statement, Harman filed against
his own uninsured coverage. The plaintiff argues that his
uninsured coverage should apply because State Farm "denied
coverage" when he attempted to make a claim against Neal's policy.
West Virginia Code § 33-6-31(c) defines an uninsured motor vehicle
as a motor vehicle to which there is no: (i) bodily injury,
liability insurance and property damage liability insurance both in
the amount specified by Section 2, Article 4, Chapter 17D as
amended from time to time or (ii) there is such insurance but the
insurance company writing the same denies coverage thereunder . .
. ." Thus, because Harman could not collect against Neal's
liability policy, he filed a claim against his own uninsured
We cannot agree to such convoluted logic. To permit a
claim for uninsured motorist coverage in this case would make the
statute of limitations, regardless of length, meaningless since a
plaintiff could always turn to their own uninsured motorist policy
for coverage, regardless of how long the plaintiff waited to file
suit past the applicable statute of limitations. In the case now
before us, Mr. Neal was not operating an uninsured motor vehicle on
the day of the accident. The only reason that uninsured motorist
coverage is arguably applicable at this point is because the two-year statute of limitations for the tort action against Neal had
Likewise, we find no merit in the authority cited by the
plaintiff in support of his argument. While the treatise cited by
the plaintiff, Uninsured and Underinsured Motorist Coverage, supra,
states that "the impact of a denial of liability by the
tortfeasor's insurer is the same in its effect on the injured
parties as the complete absence of insurance would be," it also
fails to take into account the lapse of the applicable statute of
limitations. The case at hand involves more than a simple denial
of liability. The ability of a lawsuit to survive in court is
premised on a fundamental element -- whether the suit was timely
filed. If not, then a court need not reach the merits of the suit.
Widiss, Uninsured and Underinsured Motorist Coverage, 2d Ed. Vol 1
p. 369 (1981).
Further, the defining language of W.Va. Code § 33-6-31(c)(ii) distinguishes a statute of limitations dismissal from a
denial of coverage. As above noted, W.Va. Code § 33-6-31(c)(ii)
allows uninsured motorist coverage when insurance exists, but is
denied. In this case, the coverage no longer exists since it
lapsed when the Neal liability policy statute of limitations ran,
approximately one and one-half years prior to the filing of the law
suit. Consequently, we hold that a plaintiff's uninsured motorist
coverage is not available as an alternative to the tortfeasor's
liability coverage when the plaintiff did not file a claim against
the tortfeasor's insurance company until after the statute of
limitations had lapsed on the tortfeasor's liability policy.. See
also 8C Appleman, Insurance Law & Practice § 5076.15 et seq.
(1981). Thus, there is no basis for the plaintiff's suit against
his own uninsured motorist policy, since the uninsured motorist
policy was not available for damages resulting from the November 8,
1988, accident after the Neal liability policy statute of
Recently, this Court addressed the issue of whether a
plaintiff, who had settled for policy limits against the
tortfeasor's liability carrier, could sue his/her own underinsured
motorist insurance carrier. Postlethwait v. Old Boston Colony
Insurance Co., No. 21347 (June 28, 1993). Previous case law, which
had not reached that precise issue, essentially required that the
plaintiff sue the tortfeasor before the plaintiff could sue for
his/her own uninsured/underinsured coverage. In Postlethwait, the
Court ruled that a plaintiff could sue their uninsured/underinsured
carrier after settling with the tortfeasor's liability carrier if
the settlement was for the full policy limits and the
uninsured/underinsured carrier waived its right of subrogation
against the tortfeasor. Id. at Syl. pt. 4.
The situation in Harman is quite different. Although he
had an opportunity, Harman did not settle his claim for any amount.
In fact, the only reason he sued under his own uninsured motorist
policy is because he failed to file suit against Neal prior to the
tolling of the statute of limitations for the tort claim. Further,
State Farm did not waive its right of subrogation against the
tortfeasor at any time. Consequently, Postlethwait cannot be used
to advance Harman's claim for uninsured motorist coverage in the
Because we have held that the plaintiff's suit against
his own carrier for uninsured motorist coverage is improper, there
is no need to reach the remaining two certified questions. This
action is remanded to the United States District Court for the
Southern District of West Virginia for disposition in accordance
with this opinion.
Footnote: 1The claimed medical bills and related expenses were in excess of $8,000.
Footnote: 2During oral argument before this Court, counsel for the plaintiff admitted that the file was misplaced after the departure of an associate in his office. He also contends, however, that the issues presented are valid questions in need of discussion by this Court.
Footnote: 3For a discussion of uninsured motorist coverage, see Lee v. Saliga, 179 W.Va. 762, 373 S.E.2d 345 (1988).